[Alexandra Ocasio-Cortez Asking Members Of Congress What Would That Action Be]

[Alexandria Ocasio-Cortez:] Source: LYBIO.net
Thank you, Mr. Chairman. And thank you all, as our panelists here for lending your expertise and your insight, to help us better legislate and especially thank you to Dr. Georges for as a professor at Lehman College for representing the Bronx so well here in this body.

Um… I have a question I wanted to continue a little bit on my colleague from California’s line of questioning, about public investments in research and development. You know – I guess, you would say that that this is – would it be correct, Dr. Kesselheim, to characterize the NIH money that is being used in development and research as an early investment?

[Aaron Kesselheim:]
Yes.

[Alexandria Ocasio-Cortez:]
So the public is acting as an early investor in the production of these drugs. Is the public receiving any sort of direct return on that investment from the highly profitable drugs that are developed from that research?

[Aaron Kesselheim:]
No, in most cases there is – when those products are eventually handed off to a for-profit company, there aren’t licensing deals that bring money back into the coffers of the NIH. That usually doesn’t happen.

[Alexandria Ocasio-Cortez:]
So the public is acting as an early investor, putting tons of money in the development of drugs that then become privatized, and then they receive no return on the investment that they have made.

[Aaron Kesselheim:]
Right.

[Alexandria Ocasio-Cortez:]
Dr. Anderson, I have a question. Since you study comparative insurance systems, are there models where the public does receive returns on investments in other insurance models across the world?

[Dr. Anderson:]
There are a few but they’re relatively uncommon.

[Alexandria Ocasio-Cortez:] Source: LYBIO.NET
Um… hm… And how does that tend to work?

[Dr. Anderson:]
So essentially if the places that the UK or someplace like that have invested money in it, they will get some rate of return on those investments. But again it’s relatively uncommon.

[Alexandria Ocasio-Cortez:]
I also have one question for Dr. Georges. Please stop me if I’m going out of the scope of your expertise. As a nurse – in your experience as a nurse do you have knowledge of the VA? Like in general knowledge of the VA and how the VA works…

[Catherine Alicia Georges:]
Yes, some knowledge.

[Alexandria Ocasio-Cortez:]
And in your experience is the VA as a public-owned and operated, operation rather, are the drug prices in the VA lower or higher or the same as what we seen each…

[Catherine Alicia Georges:]
Well that I can’t seem to – I don’t have that kind of knowledge.

[Aaron Kesselheim:]
They tend to be much lower than in other places…

[Dr. Anderson:]
About 31% lower than what Medicare pays.

[Alexandria Ocasio-Cortez:]
So the VA tends to be lower. And can you explain why anyone on the panel, why that is?

[Aaron Kesselheim:]
So – well, in part, because the VA gets some automatic statutory rebates based on the drugs that advice. But also because the VA negotiates on behalf of all of the members of the VA and is able to use its marketing power to try to negotiate that it but and also because it takes a very thoughtful approach to developing its formulary and can use inclusion on its formulary as another way of trying to negotiate a fair price for the product.

[Alexandria Ocasio-Cortez:]
So you would say and am I correct in saying that the VA is using collective bargaining power in the market to lower the price of drugs as a counter to some of the for-profit or profit-motive pressures – upward pressures on the cost of pharmaceuticals?

[Aaron Kesselheim:]
Right, yes.

[Alexandria Ocasio-Cortez:]
Okay, great. And I guess, one last question my remaining time. If you all could ask us to act as members of Congress and do one thing, one action what would that action be?

[Dr. Anderson:] Source: LYBIO.NET
So I think for me, it’s external reference prices. And that’s something that President Trump has proposed in Medicare Part B just paying 126% of what the other countries do. I’m not sure I would agree with the countries that he chose but essentially to pay 123%.

If right now in the Medicare Part D which is most of the money – we pay about three to four times what other countries pay for the same drugs.

I don’t think we can bring it down to what they pay or 126% of it but we could bring it down a lot.

[Aaron Kesselheim:]
I tend to think extra reference pricing is not a good idea. And I think that what we should do is actually get our own house in order and negotiate and try to evaluate the value and comparative and cost effectiveness of drugs better in the U.S. and try to determine what the right price is for U.S. patients rather than relying on what the prices are in other countries. But if I could say one thing that we could do I think it would be to again try to develop a system where the government could – I try to identify what the fair price is for a drug and what are reasonable prices for the drug based on the value that the drug provides to patients. And then use that to negotiate with the pharmaceutical manufacturer to try to get a more effective price that we provide.

[Catherine Alicia Georges:] Source: LYBIO.NET
We in AARP would like you to have HHS be allowed to negotiate lower drug prices on behalf of Medicare beneficiaries.